Total net revenue was $32.7 million, compared to total net revenue of $29.6 million in the comparable prior-year period.

Recurring revenues (which are comprised of support, maintenance and subscription services) were $15.9 million, or 49% of total net revenue, compared to $14.7 million, or 49% of total net revenue, for the same period in fiscal 2016. SaaS revenues for the second quarter increased 46% year over year and comprised 24% of total recurring revenues, compared to 18% of total recurring revenues in the second quarter of fiscal 2016. Approximately 23% of Products revenue in the second quarter of fiscal 2017 was related to subscription agreements compared to approximately 13% of Products revenue in the prior-year quarter.

Gross margin was 48.6% in the fiscal 2017 second quarter, compared to 59.3% in the prior-year period. The fiscal 2017 second quarter gross margin primarily reflects the previously disclosed impact of the amortization of software development costs for first generation versions of the Company's rGuest® solutions which achieved general availability in the first half of fiscal 2017.

Net loss in the fiscal 2017 second quarter was $(2.4) million, or $(0.11) per diluted share, compared to a net loss of $(0.4) million, or $(0.02) per diluted share, in the prior-year period.

Adjusted EBITDA (non-GAAP) was $1.3 million, compared to Adjusted EBITDA of $1.5 million in the same period last year (see reconciliation below).

Summary of Fiscal 2017 Six Months Financial Results

Total net revenue was $63.6 million, compared to total net revenue of $57.1 million in the comparable prior-year period.

Recurring revenues (which are comprised of support, maintenance and subscription services) were $30.9 million, or 48% of total net revenue, compared to $29.6 million, or 52% of total net revenue, in the first six months of fiscal 2016. SaaS revenues for the first six months of fiscal 2017 increased 39% year over year and comprised 22% of total recurring revenues, compared to 17% of total recurring revenues in the first six months of fiscal 2016. Approximately 21% of Products revenue in the first half of fiscal 2017 was related to subscription agreements compared to approximately 11% of Products revenue in the first half of fiscal 2016.

Gross margin was 50.4% in the first six months of fiscal 2017, compared to 59.5% in the comparable year-ago period. Gross margin for the first six months of fiscal 2017 primarily reflects the previously disclosed impact of the amortization of software development costs for first generation versions of the Company's rGuest® solutions which achieved general availability in the first half of fiscal 2017.

Net loss in the first six months of fiscal 2017 was $(4.7) million, or $(0.21) per diluted share, compared to a net loss of $(0.6) million, or $(0.02) per diluted share, in the first six months of fiscal 2016.

Adjusted EBITDA (non-GAAP) was $1.8 million, compared to Adjusted EBITDA of $2.7 million in the same period last year (see reconciliation below).

Jim Dennedy, President and CEO of Agilysys, commented, "The 10% revenue growth and 46% year-over-year growth in subscription-based revenue generated in the fiscal 2017 second quarter reflect momentum against key operating objectives. Increasing adoption of subscription licenses for both the new rGuest platform and the Company's iconic solutions have resulted in a 135% increase in the total contract value of bookings of subscription-based business in the first six months of fiscal 2017 compared to the first six months of fiscal 2016. The continued increase in the percentage of subscription revenues in our overall revenue mix is building a stronger foundation for Agilysys as we benefit from a larger base of recurring revenue and improve our ability to create deeper and broader connections to our customers.